Trump officials back firm in fight over California offshore oil drilling after huge spill

Plains All American Pipeline in 2022 agreed to a $230 million settlement with fishers and coastal property owners without admitting liability. Federal inspectors found that the Houston-based company failed to quickly detect the rupture and responded too slowly. It faced an uphill battle to build a new pipeline.

Three decades-old drilling platforms were subsequently shuttered, but another Texas-based fossil fuel company supported by the Trump administration purchased the operation and is intent on pumping oil through the pipeline again.

Sable Offshore Corp., headquartered in Houston, is facing a slew of legal challenges but is determined to restart production, even if that means confining it to federal waters, where state regulators have virtually no say. California controls the 3 miles (5 kilometers) nearest to shore. The platforms are 5 to 9 miles (8 to 14 kilometers) offshore.

The Trump administration has hailed Sable’s plans as the kind of project the president wants to increase U.S. energy production as the federal government removes regulatory barriers. President Donald Trump has directed Interior Secretary Doug Burgum to undo his predecessor’s ban on future offshore oil drilling on the East and West coasts.

Environmentalist sue to stop the project

"This project risks another environmental disaster in California at a time when demand for oil is going down and the climate crisis is escalating," said Alex Katz, executive director of Environmental Defense Center, the Santa Barbara group formed in response to a massive spill in 1969.

The environmental organization is among several suing Sable.

“Our concern is that there is no way to make this pipeline safe and that this company has proven that it cannot be trusted to operate safely, responsibly or even legally,” he said.

Actor and activist Julia Louis-Dreyfus, who lives in the area, has implored officials to stop Sable, saying at a March protest: “I can smell a rat. And this project is a rat.”

The California Coastal Commission fined Sable a record $18 million for ignoring cease-and-desist orders over repair work it says was done without permits. Sable said it has permits from the previous owner, Exxon Mobil, and sued the commission while work continued on the pipeline. In June, a state judge ordered it to stop while the case proceeds through the court. The commission and Sable are due back in court Wednesday.

“This fly-by-night oil company has repeatedly abused the public’s trust, racking up millions of dollars in fines and causing environmental damage along the treasured Gaviota Coast,” a state park south of Santa Barbara, said Joshua Smith, the commission’s spokesman.

Sable keeps moving forward

So far, Sable is undeterred.

The California Attorney General’s office sued Sable this month, saying it illegally discharged waste into waterways, and disregarded state law requiring permits before work along the pipeline route that crosses sensitive wildlife habitat.

“Sable placed profits over environmental protection in its rush to get oil on the market,” the agency said in its lawsuit.

Last month, the Santa Barbara District Attorney filed felony criminal charges against Sable, also accusing it of polluting waterways and harming wildlife.

Sable said it has fully cooperated with local and state agencies, including the California Department of Fish and Wildlife, and called the district attorney's allegation “inflammatory and extremely misleading.” It said a biologist and state fire marshal officials oversaw the work, and no wildlife was harmed.

The company is seeking $347 million for the delays, and says if the state blocks it from restarting the onshore pipeline system, it will use a floating facility that would keep its entire operation in federal waters and use tankers to transport the oil to markets outside California. In a filing with the U.S. Securities and Exchange Commission on Thursday, the company updated its plan to include the option.

Fulfilling the president's energy promise

The U.S. Interior Department’s Bureau of Safety and Environmental Enforcement said in July it was working with Sable to bring a second rig online.

“President Trump made it clear that American energy should come from American resources,” the agency’s deputy director Kenny Stevens said in a statement then, heralding the "comeback story for Pacific production.”

The agency said there are an estimated 190 million barrels (6 billion gallons) of recoverable oil reserves in the area, nearly 80% of residual Pacific reserves. It noted advancements in preventing and preparing for oil spills and said the failed pipeline has been rigorously tested.

“Continuous monitoring and improved technology significantly reduce the risk of a similar incident occurring in the future,” the agency said.

CEO says project could lower gas prices

On May 19 — the 10th anniversary of the disaster — CEO Jim Flores announced that Sable “is proud to have safely and responsibly achieved first production at the Santa Ynez Unit” — which includes three rigs in federal waters, offshore and onshore pipelines, and the Las Flores Canyon Processing Facility.

State officials countered that the company had only conducted testing and not commercial production. Sable's stock price dropped and some investors sued, alleging they were misled.

Sable purchased the Santa Ynez Unit from Exxon Mobil in 2024 for nearly $650 million primarily with a loan from Exxon. Exxon sold the shuttered operation after losing a court battle in 2023 to truck the crude through central California while the pipeline system was rebuilt or repaired.

Flores said well tests at the Platform Harmony rig indicate there is much oil to be extracted and that it will relieve California's gas prices — among the nation's highest — by stabilizing supplies.

“Sable is very concerned about the crumbling energy complex in California," Flores said in a statement to The Associated Press. “With the exit of two refineries last year and more shuttering soon, California’s economy cannot survive without the strong energy infrastructure it enjoyed for the last 150 years.”

California has been reducing the state’s production of fossil fuels in favor of clean energy for years. The movement has been spearheaded partly by Santa Barbara County, where elected officials voted in May to begin taking steps to phase out onshore oil and gas operations.

Associated Press writer Matthew Brown in Billings, Montana contributed to this report.